Tag: trump

Stacy Blatt was in hospice care last September listening to Rush Limbaugh’s dire warnings about how badly Donald Trump’s campaign needed money when he went online and chipped in everything he could: $500. It was a big sum for a 63-year-old battling cancer and living in Kansas City on less than $1,000 per month. But that single contribution — federal records show it was his first ever — quickly multiplied. Another $500 was withdrawn the next day, then $500 the next week and every week through mid-October, without his knowledge — until Blatt’s bank account had been depleted and frozen. When his utility and rent payments bounced, he called his brother, Russell Blatt, for help. What the Blatts soon discovered was $3,000 in withdrawals by the Trump campaign in less than 30 days. They called their bank and said they thought they were victims of fraud. Sign up for The Morning newsletter from the New York Times “It felt,” Russell Blatt said, “like it was a scam.” But what the Blatts believed was duplicity was actually an intentional scheme to boost revenues by the Trump campaign and the for-profit company that processed its online donations, WinRed. Facing a cash crunch and getting badly outspent by the Democrats, the campaign had begun last September to set up recurring donations by default for online donors for every week until the election. Contributors had to wade through a fine-print disclaimer and manually uncheck a box to opt out. As the election neared, the Trump team made that disclaimer increasingly opaque, an investigation by The New York Times showed. It introduced a second prechecked box, known internally as a “money bomb,” that doubled a person’s contribution. Eventually its solicitations featured lines of text in bold and capital letters that overwhelmed the opt-out language. The tactic ensnared scores of unsuspecting Trump loyalists — retirees, military veterans, nurses and even experienced political operatives. Soon, banks and credit card companies were inundated with fraud complaints from the president’s own supporters about donations they had not intended to make, sometimes for thousands of dollars. The sheer magnitude of the money involved is staggering for politics. In the final 2 1/2 months of 2020, the Trump campaign, the Republican National Committee and their shared accounts issued more than 530,000 refunds worth $64.3 million to online donors. All campaigns make refunds for various reasons, including to people who give more than the legal limit. But the sum the Trump operation refunded dwarfed that of Joe Biden’s campaign and his equivalent Democratic committees, which made 37,000 online refunds totaling $5.6 million in that time. The recurring donations swelled Trump’s treasury in September and October, just as his finances were deteriorating. He was then able to use tens of millions of dollars he raised after the election, under the guise of fighting his unfounded fraud claims, to help cover the refunds he owed. In effect, the money that Trump eventually had to refund amounted to an interest-free loan from unwitting supporters at the most important juncture of the 2020 race. Political strategists, digital operatives and campaign finance experts said they could not recall ever seeing refunds at such a scale. Trump, the RNC and their shared accounts refunded far more money to online donors in the last election cycle than every federal Democratic candidate and committee in the country combined. Donors typically said they intended to give once or twice and only later discovered on their bank statements and credit card bills that they were donating over and over again. Some, like Stacy Blatt, who died of cancer in February, sought an injunction from their banks and credit cards. Others pursued refunds directly from WinRed, which typically granted them to avoid more costly formal disputes. Jason Miller, a spokesperson for Trump, downplayed the rash of fraud complaints and the $122.7 million in total refunds issued by the Trump operation. He said internal records showed that 0.87% of its WinRed transactions had been subject to formal credit card disputes. “The fact we had a dispute rate of less than 1% of total donations despite raising more grassroots money than any campaign in history is remarkable,” he said. A Small Yellow Box and a Flood of Fraud Complaints The small and bright yellow box popped up on Trump’s digital donation portal around March 2020. The text was boldface, simple and straightforward: “Make this a monthly recurring donation.” The box came prefilled with a checkmark. Even that was more aggressive than what the Biden campaign would do in 2020. Biden officials said they rarely used prechecked boxes to automatically have donations recur monthly or weekly; the exception was on landing pages where advertisements and emails had explicitly asked supporters to become repeat donors. But for Trump, the prechecked monthly box was just the beginning. By June, the campaign and the RNC were experimenting with a second prechecked box, to default donors into making an additional contribution — called the money bomb. An early test arrived in the run-up to Trump’s birthday, June 14. The results were tantalizing: That date, a seemingly random Sunday, became the biggest day for online donations in the campaign’s history. The two prechecked yellow boxes would be a fixture for the rest of the campaign. And so would a much larger volume of refunds. Until then, the Biden and Trump operations had nearly identical refund rates on WinRed and ActBlue in 2020: 2.18% for Trump and 2.17% for Biden. But from the day after Trump’s birthday through the rest of the year, Biden’s refund rate remained nearly flat, at 2.24%, while Trump’s soared to 12.29%. Around the same time, officials who fielded fraud claims at bank and credit card companies noticed a surge in complaints against the Trump campaign and WinRed. “It started to go absolutely wild,” said one fraud investigator with Wells Fargo. “It just became a pattern,” said another at Capital One. A consumer representative for USAA, which primarily serves military families, recalled an older veteran who discovered repeated WinRed charges from donating to Trump only after calling to have his balance read to him by phone. The Trump operation was not done modifying the yellow boxes. Soon, the fact that donations would be withdrawn weekly was taken out of boldface type, according to archived versions of the president’s website, and moved beneath other bold text. As the campaign’s financial problems became increasingly acute, the yellow boxes became dizzyingly more complex. By October there were sometimes nine lines of boldface text — with ALL-CAPS words sprinkled in — before the disclosure that there would be weekly withdrawals. As many as eight more lines of boldface text came before the second additional donation disclaimer. The ‘Gary and Gerrit’ Operation By last summer, the Biden campaign had begun outraising Trump’s team, and the president was hopping mad. For months, years even, his advisers had been telling him how he had built a one-of-a-kind financial juggernaut. So why, Trump demanded to know, was he off the television airwaves just months before the election in critical battleground states like Michigan? “Where did all the money go?” he would lash out, according to two senior advisers. Inside the Trump reelection headquarters in Northern Virginia, the pressure was building to wring ever more money out of his supporters. Perhaps nowhere was that pressure more acute than on Trump’s expansive and lucrative digital operation. That was the unquestioned domain of Gary Coby, a 30-something strategist whose title — digital director — and microscopic public profile belied his immense influence on the Trump operation, especially online. A veteran of the RNC and the 2016 race, Coby had the confidence, trust and respect of Jared Kushner, the president’s son-in-law, who unofficially oversaw the 2020 campaign, according to people familiar with the campaign’s operations. Kushner and the rest of the campaign leadership gave Coby, whose talents are recognized across the Republican digital industry, wide latitude to raise money however he saw fit. That meant almost endless optimization and experimentation, sometimes pushing the traditional boundaries. The Trump team repeatedly used phantom donation matches and faux deadlines to loosen donor wallets (“1000% offer: ACTIVATED…For the NEXT HOUR”). Eventually it ratcheted up the volume of emails it sent until it was barraging supporters with an average of 15 per day for all of October and November 2020. Coby declined an interview request for this article. Coby’s partner in fundraising was Gerrit Lansing, president of WinRed, which had been created in 2019 as a centralized platform for GOP digital contributions after prominent Republicans feared they were falling irreparably behind Democrats and ActBlue. Top Trump officials said they did not know specifically who had conceived of using the weekly recurring prechecked boxes — or who had designed them in the increasingly complex blizzard of text. But they said virtually all online fundraising decisions were a “Gary and Gerrit” production. Unlike ActBlue, which is a nonprofit, WinRed is a for-profit company. It makes its money by taking 30 cents of every donation, plus 3.8% of the amount given. WinRed was paid more than $118 million from federal committees the last election cycle; even after paying credit card fees and expenses like payroll and rent, the profits are believed to be significant. WinRed even made money off donations that were refunded by keeping the fees it charged on each transaction. All told, the Trump and party operation raised $1.2 billion on WinRed and refunded roughly 10% of it. And after Trump’s first public speech of his post-presidency at the end of February, his new political operation sent its first text message to supporters since he left the White House. “Did you miss me?” he asked. The message directed supporters to a WinRed donation page with two prechecked yellow boxes. Trump raised $3 million that day, according to an adviser, with more to come from the recurring donations in the months ahead. This article originally appeared in The New York Times. © 2021 The New York Times Company
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